Sunday, June 10, 2012

Is Capitalism Christian?

Everyone knows that the unemployment rate is too high.  yet businesses are enjoying record profits.  Why aren't they hiring?  As the Motley Fool tells us,
•Sales are too low.  
•Since sales are low, businesses are keeping profits up by keeping expenses (like employment) down. That's why profit margins are near record highs.

After describing a friend whose moving business slashed employment, wages, and benefits, Berkshire Hathaway (NYSE: BRK-B ) Vice Chairman Charlie Munger was asked if his friend would ever revert to the old way of business. He replied: "No, it's never going back. He squeezed the cost out. That's one of the main troubles of the economy, that everybody has done what my friend in the moving business has done. It's perfectly logical."

"That's the way capitalism works," he said.
But if people don't have jobs, they can't buy--and sales stay low. I've argued before that monetary profit shouldn't be the only type.  Employment is a profit too.   Putting money and stock value above everything else breaks a social contract.

And in this recent piece in the New Yorker describing several books on the subject, Nicholas Lehmann writes,
Before the late nineteen-seventies, corporations were not managed for “shareholder value” to the extent that they are today, and many of them offered de-facto lifetime employment and generous health benefits and pensions. The more regulated and localized American economy had all sorts of inefficiencies and trade barriers that created safe harbors for institutions like banks, department stores, insurance companies, fixed-commission stock brokerages, and middlemen in supply chains. Unions were more powerful. In the “new economy,” each line of business tends to have one dominant, global, mainly non-union player, such as Apple, Facebook, or Google. Judt isn’t naïve enough to believe that people will simply come to their senses and reinstate social democracy as it was during its prime, but he does insist, like Rothkopf, that we will have to find ways to shift power from the market and back toward the state….
But now that capitalism is a religion, that's unlikely.

Recently, the NY Times blog discussed partisanship.  And there is a huge divide in moral values (my emphasis)
By two to one, 53-26, Democrats believe that capitalism and Christianity are not compatible. Republicans, in contrast, believe there is no conflict, by a 46-37 margin. Tea Party supporters are even more adamant, believing that capitalism and Christian values are compatible by a 56-35 margin.
Is profit over people (which is what Capitalism has become) a Christian value?  Discuss.

8 comments:

JCF said...

My late mom told me this old saying:

"When Adam delved
And Eve span,
Who was then
The gentleman?"

Where, in the plans for Creation, were capital gains? Credit default swaps? Derivatives? Shorting the market?

[As for profit, Jesus warned about "building bigger barns"]

No, the two are not compatible. Can't serve God AND Mammon.

Ann said...

Speaking to the Soul reflects on this very thing today.

Ann Woodyard said...

Capitalism as it is practiced on Wall Street and at companies such as Bain Capital is very different from the economic system described by Adam Smith in "Wealth of Nations" and moderated my "Theory of Moral Sentiments". Smith acknowledges the power of self-interest, but states that moderating influences such as empathy for others, desire for the common good, and maintaining the esteem of others will keep controllers of capital from getting out of hand. What we see today is more like the bastard child of poor auld Adam Smith and Macchiavelli.

JCF said...

Don't forget Ayn Rand!

MarkBrunson said...

I simply answer "no."

I'm sorry, but I see no possible scenario in which a movement which began with "they held all in common" can be jibed with any definition of capitalism. It is simply beyond my comprehension. Christianity goes, I believe, far deeper than mere empathy. It asks we give all, even for those for who we have no feeling or understanding. As for the esteem of others, I believe Christ spoke rather forcefully against seeking that.

Anonymous said...

Let me weave a story. In my hometown there used to be a famous choclate producer. The city gave this company "favored status". A few years ago the CEO moved the company plant to Mexico closing not only our plant but one in Canada. The CEO, brave soul, gave the following reason: the cost of wages and benefits can no longer be afforded. Mexico has cheap labor with almost no benefits. But, by doing this the company can create more different types of candy bars. Wow!

BTW, about two years later the CEO was fired.
This is capitalism at it's finest. Capitalism works hand in glove with a democratic society when hell freezes.

Fred is back.

JCF said...

Fred. Fred in San Joaquin? Fred, are you in Oakdale? [I remember that Hershey plant!]

Anonymous said...

Hi, JCF